Wednesday, August 03, 2011

"A casual observer certainly might conclude that the wheels just fell off the recovery wagon"

John A. Challenger, chief executive officer of Challenger, Gray & Christmas, commenting on the high level of layoffs in July 2011, including at Merck & Co., Borders, Cisco Systems, Lockheed Martin and Boston Scientific: "A casual observer certainly might conclude that the wheels just fell off the recovery wagon"

Of Merck, the company had announced on Friday, July 29 that it will eliminate 13,000 of its 91,000 employees worldwide by 2015. Included in the shutdown was Sirna Therapeutics, a California biotechnology firm acquired by Merck specializing in RNA interference (RNAi) as a treatment. In the Pipeline suggests Merck's discovery research might move out of Rahway and to the former Schering-Plough site in Kenilworth. Just north of Merck's Rahway site on US 1 is the now abandoned site of Exxon's Corporate Research Laboratory.

24/7WallSt , comparing Merck and Pfizer, discussed the patent issue: Differences between the two companies is most evident in the strategic measures the big pharma players seem to be taking to meet challenges arising from the expiration of key patents and the rise of generic competition.(...) Merck’s strategic approach calls a glide path involving planned job cuts and a flat-to-down paring of its massive research and development budget.

And, yes, there is a patent story related to Sirna. Charlie Schmidt wrote in Nature Biotechnology in 2007, just four years ago:

Currently based in San Francisco, Sirna spent its recent past accumulating one of the broadest RNAi patent estates in existence. Merck now owns that estate, and all the uncertainty that comes with it. As a Nobel-prize winning technology, RNAi could become biotech's third act, after gene cloning and monoclonal antibodies. But no one can say whether it will ever bring useful drugs to market. Though RNAi has become invaluable for basic research, its therapeutic potential is unknown. (...)
In lieu of drug sales (and apart from selling tools for basic research), RNAi generates income by leveraging intellectual property (IP). Patentable 'inventions' in this area include molecular features, modifications that enhance compound efficacy and gene-specific RNAi targets, among others. By licensing their inventions, companies can extract fees for use of their technology. More than 2,000 RNAi patent applications for new inventions have been filed with the US Patent and Trademark Office (USPTO)1. Yet only a few have been issued (Table 1). Understaffed and wary of errors, the USPTOis moving cautiously on its reviews, according to James P. McNamara, the executive director of the Office of Technology Management at the University of Massachusetts (UMass) Medical School, which along with three other institutions filed an early patent on RNAi.

Related to Merck's large layoff, the Newark Star-Ledger noted that New Jersey's Department of Labor and Workforce Development schedules events at companies that announce large downsizings to teach employees how to access unemployment insurance and explore other employment options

On July 21, 2011: Merck & Co., Inc., Whitehouse Station, N.J., , acting through an affiliate and known as MSD outside the United States and Canada, and China's Simcere Pharmaceutical Group today announced the signing of a framework agreement to establish a joint venture focused on serving China's rapidly expanding health care needs by providing significantly improved access to quality medicines in major therapeutic areas.


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